Raptor Pharmaceuticals Buys Quinsair: What You Need To Know

Raptor Pharmaceutical Corp. RPTP, a biopharmaceutical company with a focus on developing and commercializing transformative treatments for people affected by rare and debilitating diseases, announced Thursday evening that it has entered into a definitive agreement with Tripex Pharmaceuticals to acquire Quinsair.

According to the European Medicines Agency, Quinsair is an antibiotic used for treating long-term lunch infection caused by the bacteria Pseudomonas aeruginosa in adults who have cystic fibrosis. Quinsair has already received marketing authorization from the European Commission in March 2015 and by Health Canada in June 2015.

"The Quinsair acquisition is transformational for Raptor and delivers on our strategic focus to develop and commercialize therapies that bring significant relief to patients and families living with life-threatening diseases," stated Julie Anne Smith, President and CEO of Raptor. "This acquisition expands our portfolio and leverages both our commercial and development expertise in rare diseases. By acquiring Quinsair prior to its launch, we will be able to exclusively shape its commercial strategy and potential in cystic fibrosis and other rare diseases."

Under the terms of agreement, Raptor will pay $68.40 million upfront, with up to $34.2 million of the closing consideration payable in common stock plus contingent payments of up to $350 million associated with development, regulatory and commercial milestones. The transaction is expected to close in the third quarter of 2015 and remains subject to customary closing conditions.

At the same time, Raptor reiterated its 2015 revenue guidance of $80 to $90 million and also maintained its 2015 guidance for non-GAAP operating expenses (excluding certain expenses) to be between $115 to $125 million.

Janney: Raptor Expanding Its Franchise

In a brief report on Friday, David Lebowitz of Janney commented that Raptor continues to expand its orphan disease franchise and plans to launch its new drug in early 2016 (with revenues expected in 2017).

"The approval of Quinsair, a novel, first-in-class, inhalable broad spectrum antibiotic that targets a wide range of gram negative and gram positive bacteria, is a step in addressing an unmet need for CF patients susceptible to intractable bacterial infections," Lebowitz commented.

Raptop also discussed the pathway towards FDA approval in the US and announced plans to develop Quinsair for the treatment of two additional orphan diseases with significant unmet need, bronchiectasis (BE) and nontuberculous mycobacteria (NTM) lung infections.

Lebowitz reiterated a Buy with an unchanged "fair value estimate" of $16.